Wait for 3-4 quarters before concluding on growth rate: Chidambaram

Judith Quinn

The expansion in GVA in the first half of the current fiscal has been estimated at 5.8 per cent, down from 7.2 per cent in the year-earlier period.

The government will focus on infrastructure and rural India in the build-up to next year's budget, finance minister Arun Jaitley said on Thursday, saying the two areas can expect more spending. "But we can not say now whether this will mark an upward trend in the growth rate", Chidambaram added.

Replying to a question on how the implementation of GST has impacted the GDP, Anant said "it introduced a measure of statistical challenge for us" while calculating the growth rate.

He said deceleration trends in overall growth witnessed since Q1 of the last fiscal year had been reversed.

The fiscal second quarter (July-September), which coincided with the July 1 roll-out of GST, saw GDP growth accelerate to 6.3%, from 5.7% in the first quarter.

"Although manufacturing volume growth in Q2 FY18 was not as strong as we had initially expected on the basis of restocking after the GST, rising commodity prices and fewer discounts led to a revival in earnings", Icra Principal Economist Aditi Nayar said.

Jaitley said the acceleration in growth this quarter has been helped by a rapid growth in manufacturing which increased from 1.2 percent in the first quarter to 7 percent in the second quarter.

Releasing GDP data in New Delhi today, Chief Statistician of India T C A Anant said the GDP growth has seen a reversal trend from declining trend in the last five quarters. "We should wait for the growth rates over the next 3-4 quarters before we can reach a definite conclusion". The growth in agriculture, forestry and fishing was 1.7 per cent, mining and quarrying 5.5 per cent, construction 2.6 per cent, and financial, insurance, real estate and professional services 5.7 per cent.

As far as the CSO data is concerned, agriculture growth slumped to 1.7 per cent, but the economic activities that registered growth of over 6 per cent in the second quarter of 2017-18 year-on-year are manufacturing, electricity, gas, water supply and other utility services, trade, hotels, transport and communication and services related to broadcasting. Great news that quarterly GDP growth accelerates to 6.3 per cent against 5.7 per cent from the previous quarter.

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